DCIT, New Delhi V. M/s Metlife Global Operations Support Centre Pvt. Ltd., New Delhi

ITA 6654/DEL/2015

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8368 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2011-2012
• Appeal Filed On: 15-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY I BARA
• Assessee Lawyers: KANIKA MAKKER
• Keywords: Transfer pricing; Competent authority

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: I - 1 , NEW DELHI BEFORE SHRI AMIT SHUKLA , JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NO .6654 /DEL/ 2015 ASSESSMENT YEAR: 2011 - 12 DCIT, CIRCLE - 16(2), NEW DELHI VS. M/S. METLIFE GLOBAL OPERATIONS SUPPORT CENTRE PVT. LTD., SUIT NO. 114, PAHARPUR BUSINESS CENTRE, 21, NEHRU PLACE, NEW DELHI PAN : AAFCM5000N (APPELLANT) (RESPONDENT) APPELLANT BY SHRI SANJAY I. BARA, CIT(DR) RESPONDENT BY MS. KANIKA MAKKER, CA ORDER PER O.P. KANT, A.M.: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST ORDER DATED 20.10.2015 PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 16(2), NEW DELHI [IN SHORT THE ASSESSING OFFICER ] FOR ASSESSMENT YEAR 2011 - 12 IN COMPLIANCE TO THE DIRECTION OF THE LEARNED DISPUTE RESOLUTION PANEL (IN SHORT DRP ) DATED 07.09.2015. THE GROUNDS OF APPEAL ARE REPRODUCED AS UNDER: 1. WHETHER THE DISPUTE RESOLUTION PANEL (DRP) WAS JUSTIFIED IN REJECTION OR SELECTION OF COMPARABLES CONTESTED BY THE TAXPAYER AND ALLOWING TO RETAIN THEM IN THE FINAL SET OF THE TPO HICH WERE DISCHARGING SIMILAR NATURE OF FUNCTIONS REFERRED TO AS IT ENABLED SERVICES BY THE DATE OF HEARING 04.07.2019 DATE OF PRONOUNCEMENT 12.07.2019 2 ITA NO .6654/DEL/2015 LD. DRP EVEN WHILE IGNORING THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF MUMBAI INTERNATIONAL AIRPORT WITH REGARD TO THE DOCTRINE OF APPROBATION AND REPROBATION , WHEREIN IT HAS BEEN LAID DOWN THAT A LITIGANT CANNOT CHANGE AND CHOOSE ITS STAND TO SUIT ITS CONVENIENCE? 2. WHETHER THE LD. DRP WAS JUSTIFIED IN LAYING DOWN STRINGENT STANDARDS OF COMPARABILITY AND ATTEMPTING TO IDENTIFY EXACT REPLICA OF THE TAXPAYER FOR COMPARABILITY ANALYSIS, WHEREAS THE INDIAN LAWS AND THE INTERN ATIONAL JURISPRUDENCE RECOGNIZE THE REALITY THAT THERE CANNOT BE AN EXACT COMPARABLE IN A GIVEN SITUATION WITHOUT ANY DIFFERENCES WITHOUT APPRECIATING THAT SUCH STRINGENCY WILL DEFEAT THE PURPOSE OF FLEXIBILITY PROVIDED IN COMPARABILITY ANALYSIS FOR DETERM INATION OF ALP? 3. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE, THE DISPUTE RESOLUTION PANEL (DRP) WAS RIGHT IN REJECTING ACROPETAL TECHNOLOGIES LTD. AS A COMPARABLE BY IGNORING THE FACT THAT IT PROVIDES IT ENABLED SERVICES. 4. THE APPELLANT CRAVES TO ADD, AMEND, ALTER OR MODIFY ANY OF THE ABOVE GROUNDS OF APPEAL. 2. DURING THE HEARING BEFORE US, IT WAS SUBMITTED BY THE LEARNED COUNSEL OF THE ASSESSEE THAT THE ASSESSEE HAD MOVED FOR BILATERAL ADVANCE P RICING AGREEMENT (BAPA) WITH CBDT ON 29 TH MARCH, 2019 COVERING A PERIOD OF CONSECUTIVE FIVE YEARS COMMENCING FROM FINANCIAL YEAR 2014 - 15 TO FINANCIAL YEAR 2018 - 19 (RELEVANT TO AY 2015 - 6 TO AY 2019 - 20) WITH THE ROLL BACK YEARS COMMENCING FROM FINANCIAL YEAR 2010 - 11 TO FINANCIAL YEAR 2013 - 14 (RELEVANT TO AY 2011 - 12 TO AY 2014 - 15) . THE LEARNED COUNSEL FURTHER SUBMITTED THAT IN THE SAID BAPA , A MARK - UP OF 15% ON OPERATING COST HAS BEEN AGREED FOR THE TRANSACTION OF PROVISION IT ENABLED SERVICES AND PROVIDED THAT THE INVOICES IN THIS REGARD SHOULD BE REALIZED WITHIN A PERIOD OF 60 DAYS FROM THE DATE OF ISSUE OF INVOICE. THE LD . COUNSEL FURTHER SUBMITTED THAT PURSUANT TO SIGNING OF B APA, IN ACCORDANCE WITH THE PROVISION OF THE INCOME - TAX ACT, THE ASSESSEE HAD FILED AN APPLICATION DATED 11 TH 3 ITA NO .6654/DEL/2015 APRIL, 2019 BEFORE THE TRIBUNAL FOR WITHDRAWING ITS APPEAL BEARING ITA NO. 6188/DEL/2015 FOR THE YEAR UNDER CONSIDERATION AND THE SAID APPEAL HAS BEEN DISMISSED BY THE TRIBUNAL VIDE ORDER DATED 22 ND APRIL, 2018. FURTHER, IT WAS SUBMITTED THAT THE ASSESSEE HAS ALREADY FILED ANNUAL COMPLIANCE REPORT AND MODIFIED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION BEFORE THE ASSESSING OFFICER AND COPY OF THE SAID ACKNOWLEDGEMENT WAS ALSO SUBMITTED WHICH IS PLACED ON RECORD. THE LE ARNED COUNSEL SUBMITTED THAT AS PER RULE 10RA(5), THE APPEAL FILED BY THE REVENUE HAVE TO BE WITHDRAWN BY THE ASSESSING OFFICER WITHIN THREE MONTHS OF THE FILING OF THE MODIFIED RETURN. ACCORDINGLY, HE SUBMITTED THAT THE ASSESSING OFFICER SHOULD WITHDRAW T HE APPEAL WITHIN THE PERIOD PRESCRIBED UNDER THE ABOVE MENTIONED PROVISIONS. 3. THE LEARNED DR ALSO COULD NOT CONTROVERT THE ABOVE FACTUAL POSITION AND SUBMITTED THAT HE HAS ALREADY SOUGHT DIRECTION FOR WITHDRAWING APPEAL FROM THE COMPETENT AUTHORITY. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IN VIEW OF BAPA ENTERED INTO BY THE ASSESSEE WITH THE CBDT ON THE ISSUE OF TRANSFER PRICING ADJUSTMENT, THE ASSESSEE HAS ALREADY WITHDRAWN ITS APPEAL AND THE REVENUE IS ALSO NOT IN A POSITION TO CONTEST THE GROUND RAISED IN THE APPEAL AND THIS APPEAL HAS TO BE WITHDRAWN BY THE REVENUE IN VIEW OF THE RULE 10RA(5) WHICH READS AS UNDER: [PROCEDURE FOR GIVING EFFECT TO ROLLBACK PROVISION OF AN AGREEMENT . 10RA. (1) (2) (3) .. . (4) .. . 4 ITA NO .6654/DEL/2015 (5) IF ANY APPEAL FILED BY THE ASSESSING OFFICER OR THE PRINCIPAL COMMISSIONER OR COMMISSIONER IS PENDING BEFORE THE APPELLATE TRIBUNAL OR THE HIGH COURT FOR A ROLLBACK YEAR, ON THE ISSUE WHICH IS SUBJECT MATTER OF THE ROLLBACK PROVISION FOR THAT YEAR, THE SAID APPEAL TO THE EXTENT OF THE SUBJECT COVERED UNDER THE AGREEMENT SHALL BE WITHDRAWN BY THE ASSESSING OFFICER OR THE PRINCIPAL COMMISSIONER OR THE COMMISSIONER, AS THE CASE MAY BE, WITHIN THREE MONTHS OF FILING OF MODIFIED RETURN BY THE APPLICANT. (6) ... (7) 5. AS THE YEAR UNDER CONSIDERATION, I.E., ASSESSMENT YEAR 2011 - 12 IS COVERED IN ROLL BACK PERIOD OF BAPA AND ISSUE INVOLVED IN THE GROUNDS RAISED BY THE REVENUE IS COVERED UNDER THE B APA, THE APPEAL OF THE REVENUE IS HELD TO BE INFRUCTUOUS, HENCE, THE SAME IS DISMISSED AS SUCH. ORDER IS PRONOUNCED IN THE OPEN COURT ON 1 2 T H JULY , 2019. S D / - S D / - [ AMIT SHUKLA ] [O.P. KANT] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 2 T H JULY , 2019. RK/ - [D.T.D.S] COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI